Netflix subscribers hit 100m, but Mideast viewers slow to tune in

Updated 26 July 2017
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Netflix subscribers hit 100m, but Mideast viewers slow to tune in

LONDON: Earlier this year Netflix soared past the 100-million-subscriber mark, prompting Chief Executive Reed Hastings to celebrate with a Denny’s steak dinner, as he did when the streaming service surpassed 1 million users.
Growth has outstripped expectations this year, boosting the company’s market cap to $81 billion, seeing its share price rise from $158 to almost $190 in the past month.
But while Hastings may be dining out on growth figures worldwide, he may be less taken with numbers being served in the Middle East.
According to estimates by analytics firm IHS Markit, at the end of 2016 Netflix had just 137,000 subscribers across the Middle East and North Africa (MENA).
IHS Markit estimates that will tick up to 1.29 million by the end of 2021. Its forecasts are created by combining subscriber numbers from Netflix with their own in-house models, resulting in estimated subscriber numbers by country and region. Netflix was asked to comment on these estimates but declined to reply.
According to analysts, Netflix — makers of the popular series “House of Cards” and “Orange is the New Black” — faces multiple headwinds in growing its user base in MENA.
Issues include pirated content and the popularity of free-to-air content, but the growth potential is strong.
“Piracy and the offering of quality content for free have already played their role in keeping pay TV in MENA very low. Around 10 percent of TV households in MENA subscribe to pay TV,” IHS Markit analyst Max Signorelli told Arab News.
“These factors are definitely impacting upon the growth of services like Netflix. However, IHS Markit has noticed that in the last few years an ever-increasing portion of premium content is moving under a paywall. Operators like OSN and beIN Media... are investing heavily in acquiring and licensing premium content. So definitely there are challenges, but also the MENA region has a high potential for growth for SVoD (subscription video on demand) services.”
Hurdles to Netflix cornering MENA also include other Over The Top (OTT) services — internet-specific entertainment providers — already vying for market share, including Starz Play Arabia, icflix, Shahid Plus and Seevii.
“There are other OTT players that are working hard in the region. Starz Play recently announced another round of funding, taking it up to $125 million. Iflix… has a deal in place with Zain, so it’s present in quite a significant way in the GCC (Gulf Cooperation Council) markets,” Nick Grande, managing director of Dubai-based TV consultancy ChannelSculptor, told Arab News.
Grande added that these regional OTT players are already taking on the challenge of low pay-TV take-up, while confronting the region-specific problem of limited credit card use.
“A credit card is the most straightforward way to subscribe to an OTT service, but credit card penetration in the region is very low, especially outside the UAE and Qatar,” he said.
Internet infrastructure is also noted as a potential barrier to OTT expansion across MENA, with streaming speeds being fast in most GCC countries, but less so elsewhere.
Hassan Ghoul, a broadcast industry veteran and regional director of IABM, the international trade association for suppliers of broadcast and media technology, told Arab News: “Average connection speeds vary across the MENA countries. Broadband speed isn’t the same everywhere. The UAE has strong infrastructure to give a good connection speed to allow services like Netflix (to flourish).”
Internet speed differences mean that while watching streaming content in Dubai is easy — with the UAE boasting the second-highest fiber broadband penetration globally — it is less easy in Lebanon.
Ghoul said while it is still possible to watch streaming content in the Levant, the quality is likely to be affected by infrastructure limitations.
The big lure for many subscribers to Netflix worldwide is its content, and the deep-pocketed company has a $6 billion content budget in 2017.
A big question is whether any of that will be spent in the Middle East on Arabic-language shows to boost subscriber numbers.
“Pay-TV operators that have invested in acquiring and producing local content (such as OSN) have seen a huge increase in viewership for this particular content from their subscribers. Netflix has no option but to invest in local content in the region,” said Signorelli.
“Considering the scalability potential of Arabic content, we expect that Netflix will eventually roll out content-investment plans for the region.”
Grande agrees but says Netflix likes to make universally appealing shows “that will sell in South America, in the US, in France… like they achieved with ‘Narcos.’”
All expectations are that Netflix will invest in Arabic content at some point, with Hastings telling Campaign Middle East in April that the region is a “great market” and “there is strong interest in Internet video of all sorts.”
The TV market in MENA is forecast to grow by 30 percent from 2016 to 2021, according to a report by digital economy think tank IDATE.
AT Kearney predicts that the Middle East’s OTT sector could grow to $1.06 billion by 2020 were it to gain mass-market acceptance.
That would represent 25 percent of total TV revenue in the region, on par with the American TV market.

This article was updated on July 26, 2017. In an earlier version of the article, a quote made reference to a deal between Icflix and Zain. In fact, the interviewee was referring to Iflix, another company. This change has been reflected in the text above. Another quote was clarified to indicate that credit card use is low in the region outside the UAE and Qatar.


Police arrest newspaper publisher in midnight raid in Indian Kashmir

Ghulam Jeelani Qadri, a journalist and the publisher of the Urdu-language newspaper Daily Afaaq, leaves after a court granted him bail, in Srinagar, June 25, 2019. (REUTERS)
Updated 26 June 2019
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Police arrest newspaper publisher in midnight raid in Indian Kashmir

  • Journalists in Kashmir find themselves caught in the crossfire between the Indian government and militant groups battling for independence

SRINAGAR: Police arrested the publisher of one of the most widely read newspapers in Indian-controlled Kashmir in a midnight raid over a decades-old case, the police and his brother said on Tuesday, highlighting the difficulties facing media in the region.
Tension has run high in the Himalayan region since more than 40 Indian police were killed in a February suicide car bomb attack by a militant group based in Pakistan.
Muslim-majority Kashmir is at the heart of more than seven decades of hostility between nuclear archrivals India and Pakistan. Each claims it in full but rules only a part.
Ghulam Jeelani Qadri, 62, a journalist and the publisher of the Urdu-language newspaper Daily Afaaq, was arrested at his home in the region’s main city of Srinagar, half an hour before midnight on Monday.
“It is harassment,” his brother, Mohammad Morifat Qadri, told Reuters. “Why is a 1993 arrest warrant executed today? And why against him only?“
Qadri was released on bail after a court appearance on Tuesday.
The case dates from 1990, when Qadri was one of nine journalists to publish a statement by a militant group fighting against Indian rule in Kashmir. An arrest warrant for Qadri was issued in 1993, but it was never served.
Qadri had visited the police station involved in the arrest multiple times since the warrant was issued, most recently in 2017 to apply for a passport, his brother added.
Asked why Qadri was arrested at night, Srinagar police chief Haseeb Mughal told Reuters, “Police were busy during the day.”
The Kashmir Union of Working Journalists condemned the arrest, saying it seemed to be aimed at muzzling the press.
“Qadri was attending the office on a daily basis and there was absolutely no need for carrying out a midnight raid at his residence,” it said in a statement.
Journalists in Kashmir find themselves caught in the crossfire between the Indian government and militant groups battling for independence.
Both sides are stepping up efforts to control the flow of information, with the situation at its worst in decades, dozens of journalists have told Reuters.
India is one of the world’s worst places to be a journalist, ranked 138th among 180 countries on the press freedom index of international monitor Reporters Without Borders, with conditions in Kashmir cited as a key reason.